Digital assets now play a far bigger role in estate planning than they ever did.
The knowledge exchange platform JD Supra investigated the issue in a recent article, exploring what constitutes digital assets and how much they might be worth.
Almost everyone in the modern world has digital assets. In their most basic form, a digital asset is a non-physical thing that exists online in electronic format. They might be photographs kept in online albums or in the cloud, but are also ebooks, music, films and more.
Contract to enjoy rather than own
When it comes to digital assets, we don’t necessarily own what we think we do. Online services often mean a user signing up for terms and conditions he or she doesn’t read—a contract to enjoy a service rather than own it the way you might a physical book, say.
Passing on your ebook collection or music might not be as easy as assumed because the content is enjoyed on a licensed basis and is not yours to pass on.
But digital assets can also mean assets held for the financial worth, such as cryptocurrencies, credit card rewards, or income-generating websites or blogs, written works that are sold, digital copyrights and trademarks.
Tax value of assets
It may also mean your digital assets need to be taken into account when assessing if an estate meets the inheritance tax threshold.
As the ownership of digital assets has risen, so to has cybercrime aimed at stealing those assets. Criminals hack into accounts to steal information that can then be sold or plagiarise books or pirate music. They also target online investment accounts.
The article cited a recent case in New York where a couple accidentally wired $1.9 million to cybercriminals who’d hacked into the couple’s email account and discovered news of a transaction about to take place. The criminals then set up instructions for a fake wire transfer.
Do you hold any unclaimed assets? Finders International can assist with tracing the owners and offer bespoke solutions to suit. Typically assets remain unclaimed because the owners have moved, passed away, cannot be traced or are unresponsive when correspondence is sent to their last known address.
A security risk is one of the major concerns for high net worth individuals, many of whom seek attorneys to help them navigate the legalities around digital assets. Services include creating a list of their digital assets and provides instructions on how to access each asset. The password and login details for accessing digital assets can be stored on password storage websites.
People also need to think about how they would want their hits to access and manage digital assets when they die or in case of incapacity.